Asset Performance Management Maturity Model - Capgemini

1 Asset Performance Management Maturity ModelStrategic Roadmap to Digital Manufacturingthe way we see itNatural Resources & ChemicalsContentsAbstract 31 Introduction 4 Overview of Asset Performance Management (APM) 4 Why Now is a good time to relook at your APM Strategy 52 APM Maturity Model 6 Overview of Maturity Model 6 APM Dimensions 8 Maturity Assessment Approach 93 Business Benefits of APM 10 Conclusion 11 About the Authors 11 References 11 This message contains information that may be privilaged or confidential and is the property of theCapgemini Group. Copyright 2017 Capgemini . All rights industries operate in an environment of volatility and are under tremendous pressure to improve operations and keep a check on costs.

2 Digital Manufacturing or Industry , enabled by low cost sensors and smart manufacturing operations, is changing the way the industry is operating. With machines communicating and exchanging information in real time, industrial production processes are becoming more and more efficient. The technologies behind digital manufacturing could help manufacturers keep up with the changing demands of the market and stay relevant. But with so many possibilities and technologies around digital manufacturing, how does one get to know the right technology that will help them solve their complex problems? The key questions that puzzle Asset -intensive organizations are How does one determine if the assets are operating effectively? and How can these be improved ? One of the elements of Digital Manufacturing that can answer these questions is Asset Performance Management (APM). Organizations need to periodically assess their assets and determine if they are operating at the ideal level.

3 With ever-changing customer needs, regulatory environments, and advancements in technology, this is a perfect time to assess your position and whitepaper highlights the Asset Performance Maturity Model as well as the various principles of Asset Management that may be way we see itNatural Resources & ChemicalsThe business environment for natural resources and manufacturing companies has seen a steady improvement over the past few years, but these firms need to continue their focus on adding shareholder Digital Manufacturing or Industry movement presents a significant opportunity to improve manufacturing outcomes and efficiencies. Advances in information technology and sensors, paired with the availability of copious industrial data, efficient connectivity, and advanced computational ability is proving to be a game changer for improving maintenance strategies and manufacturing outcomes. The factory of the future (and the future is now!) will have end-to-end digitization of information flows, digitization of physical assets, and integration of value chain partners leading to hyper efficiency, yield improvement, and customer has the din and hype around digital manufacturing left you with too many good ideas and no point of departure?

4 In this series of whitepapers, Capgemini identifies and guides clients to move beyond the hype. One of the key elements of digital manufacturing focuses on Asset Performance Management (APM). For Asset intensive companies in particular, and manufacturing industries in general, it is critical to include Asset Performance Management as a key component of digital manufacturing Overview of Asset Performance Management (APM) The primary objective of Asset Performance Management (APM) is to help organizations increase their Asset efficiency, manage assets sustainability, improve customer centricity, and optimize the total cost of ownership. Improving Asset Performance helps organizations not only reduce costs, but also keep production plans on track while catering to end demands. According to a McKinsey research report, improved Asset efficiency will contribute to an incremental value of more than $250 billion in the by improve Asset Performance , Capgemini recommends an Asset Performance Management Maturity Model approach.

5 The Asset Performance Management Maturity Model approach involves continuous benchmarking that helps organizations determine their present state, compare it with industry peers, recognize improvement areas, and identify opportunities and risks associated with their assets. The APM Maturity Model will enable organizations to design the roadmap to improved APM Introduction4 Asset Performance Management Maturity Why Now is a good time to relook at your APM StrategyP&L Impact AreaMaintenanceCostProductionCostProduct ionCapacityQualityAssetLifespanImpactOnF inancialMetricsOperationalExpensesCOGSR evenueOperating Cost & RevenueInventoryCapital ExpenditureBalance SheetImpact areaOutcomes8% to 15%Reduction inMaintenance costClose to 1%Reductionin overallProduction cost2% to 5% Increasein revenuethroughProductionCapacityImprovem ent3% to 5%Improvementin Quality2% to 5%Improvement inAsset LifespanFigure 1 Affect of APM on Financial AreasOne of the reasons for the underinvestment in technology was the lack of clarity on the benefits accrued or the return on investment.

6 Yet with the right technologies in place, manufacturers can focus on core areas while accommodating frequent regulatory environment changes and changing customer needs. Asset intensive companies face challenges in getting the best out of their assets. Prolonged overlooking of unscheduled maintenance, equipment breakdowns, lack of visibility into operations, and heavy spare part inventory levels, will eventually lead to an unhealthy balance sheet and a company losing out to its competitors. There is no instant solution to address these problems. Investing in places that do not produce enough gains will only deepen the problem. APM follows a Maturity curve, and it is essential to identify the current level of Maturity . Once identified, then the next steps in the areas of process, technology, and governance can be laid out. By taking this step-by-step approach, companies can understand what technology and process improvements will yield the required benefits.

7 The right APM strategy will clearly make an impact on company s profitability. The financial areas affected by APM are as follows:5the way we see itNatural Resources & ChemicalsAn Asset Performance Management Maturity Model is a systematic approach to analyzing an organization s Asset Management processes, technologies, capabilities, and systems. Improving the Maturity level will help an organization achieve ideal levels of APM Overview of Maturity Model The APM Maturity Model can help organizations understand their present capabilities and skills, and identify a sequence of steps required to progress to the next level. The APM Maturity curve is broken into five stages with each stage having a set of unique capabilities. The first stage of the Maturity curve represents manual or unmanaged processes for Asset Management , while the last (fifth) stage represents an ideal operating level of industrial equipment effectiveness (OEE) measures the productivity of assets, and efficiency measures total cost of operations.

8 For companies to thrive in the competitive market, it is important that both Asset effectiveness and efficiency operate at the best levels. The Maturity Model approach helps to maximize the effectiveness and efficiency of APM Maturity Model 6 Asset Performance Management Maturity ModelFigure 2 APM Maturity ModelThe following diagram represents the broad indicators defined by Capgemini at each level of the Maturity Model :IncrementalValueLifecycle ImpactEffective (OEE)Efficient(Op. cost)Effective (OEE)Efficient(Op. cost)Effective (OEE)Efficient(Op. cost)Effective (OEE)Efficient(Op. cost)PlanAcquireDeployManageDisposeMaint enance - Cost Focus Maintenance - Investment FocusLevel 3 Level 2 Level 1 Level 4 Level 0 Asset History at Floor IIOT / Connected Assets Pro-Active Maintenance Systematic Framework for CI OEE Drill-down & Live Data AR (Augmented Reality) in Training & Service Focus on reliability Asset Life cycle focus and Impact Inbuilt Intelligence Asset Data collection& Reporting Condition based/Predictive Maintenance Error Proofing OEE Monitoring Plant Simulation Integrated Supply Chain Decision Support Energy Management Asset Visibility Periodic Maintenance Plan Process Excellence- Asset Category, Comparison Asset Strategy / Roadmap OEE Measurement Enterprise Aligned Metrics SOPs, Checklist, Manuals Automation Reactive MaintenanceAd-Hoc/InitialDefined /PreliminaryAdoptionCompliant /NormativeEvolving/IntegratedEnterpriseE xecutionExcellence7the way we see itNatural Resources & APM DimensionsCapgemini has defined six APM dimensions along with the capabilities required at each Maturity level.

9 An organization s Asset Management Maturity level is evaluated on these six dimensions Asset Information Management : For an organization to have an effective Asset Performance Management , they need to have accurate information regarding the assets on the plant floor. Lack of availability and access to the information about the assets at the plant floor will impair the organization s ability to make the right decisions. The Asset Information Management dimension will indicate how effectively the organization manages its Asset information. The information being assessed will also include Asset strategy, financials, and information systems. The Asset information can be used to predict and prevent Asset failures. The Maturity Model approach will help understand the organization s capability to capture Asset data, monitor Asset information, and predict and mitigate failure proactively. Process Management : It is necessary for organizations to develop and maintain standard Management processes and guidelines to support their Asset Management systems.

10 In Asset intensive industries, it becomes extremely difficult to track Asset warranties. Every Asset may have different warranty contracts that expire at different times and have different methods of renewal. Tracking claims can consume significant time and effort. Failure to correctly track and process claims could result in huge losses due to warranty expiration and incorrect claims. The extent to which these Management processes and guidelines are enabled through systems and SOPs with continuous monitoring and improvement determines the Maturity level. Reliability and Performance : Reliability is the ability of assets to operate for a specific time period without failure. Downtime of assets can seriously affect profitability. Incorporating maintenance plans with production plans can mitigate the breakdown of assets. Continuous measurement and monitoring of Performance metrics (SMRP KPI s) will help identify areas of improvement. The type of metrics and frequency of measurement determines the Maturity level.